Micropayments in Your Business
Why Micropayments Could Count in Your Business
A lot of people I speak to are using services that they pay very little for. Micropayments are regarded as transactions south of £10 and they can go all the way down to almost nothing. Are you using micropayments in your business?
Fiverr.com is a portal that enables buyers to purchase services for – you guessed it – $5 per transaction, so if you wanted someone to write blogs for you twice each month to help keep your content current you can buy a blog, sometimes 2 or 3, for $5. Artwork, promotional videos, logo design and animations are all here for the mighty price of £3.16 (at today’s exchange rate).
Jeff Bezos (founder of Amazon) bought the Washington Post in 2013 and immediately announced that he was considering micropayments as a way of funding the news. Like the start of an article? Read the rest of it for 20 cents.
I see it working. I bought the Sunday Times for many years and every week had to sort it into the parts (sometimes 11 different parts) that I would read and those that I wouldn’t. I was paying for a lot of content that had no interest for me. Sport would go straight into recycling. I don’t go to the theatre or to concerts very often; so much of Culture was completely passed over- there is an admission! I don’t know anyone who would have a birth, birthday or a death published in the Sunday Times, so that was closed territory – anyway, you get the idea. I was paying for a lot of stuff that I didn’t want.
Keep them under control
The downside of micropayments for the paying party is that they go a little under the radar because of their individual financial insignificance but, if the payment is monthly for a service you use only occasionally, you may wish to review yours.
I had a conversation recently with someone who started a small business just over two years ago. The business model had evolved and outgoings on micropayment services were more of the operating costs than they needed to be.
The actual figure was 8% of costs, but it should have been 5% if the unused services were ditched as soon as they weren’t needed, returning a reduction in costs equivalent to 37.5% of the micropayments made.
With operating costs of £5k per month, that’s £150 freed up for something else. It’s not big money, but in a small business every penny can make a difference.
Takeaway – have a think about where you could use micro payments in your business
Micropayments are developing as a serious contender in the small business economy, not least because many people forget that they’re paying them or think that stopping the £3.16 payment isn’t worth the hassle of the process ‘right now’ and resolve to do it soon. In the interim between now and soon another payment leaves their account and lands into the pocket of someone who did take the time and is seeing monthly revenue for doing nothing. Find the time folks! I have planned in June to set up two trials and showcase them on here for you to see how it worked for me.